Help! Got a good thing going, and I don't want to mess it up!

[Josh P.]

I've been on here a couple of days already and I'm loving the discussion. Ok. I'm really just getting started in earnest. I have one property, an older but stately three unit in the downtown area of my home city. I've decided to go high end with this one, but I bought it right, so right now my numbers are:

Note taxes and insurance-$860 (15 year)
Water-60ish

Rents-$2200

Like I said, I bought it right, and made some cosmetic improvements. That said, I think it could appraise for significantly more than I bought it for. My wife and I find that out next week.

Best case, if it appraises out at around 105k, (which it may not, there are few comps and the place is older)

I'll have around 30k to play with. So I'm thinking the next logical step may be to use that as down payments on more properties or just one down payment on one property. I guess my question is, what do you do in my position? I feel like I have a really good thing going here and I want to try and keep it stellar. What are your thoughts?

[Josh P.]

Paul, I'm glad you mentioned that. My situation is unique, both with my lender and in general. My lender only requires 10 percent down, and will take half of that in the form of a car title, piece of land etc.

I do wonder if I'm paying for that potential flexibility in the form of higher interest rate (6.5% fixed for 5 years with a 12% cap)

I've been in contact with them regarding this refi and they plan to send a guy out next week to do what I think isn't going to be a very involved appraisal, but which I think will be fairly accurate, and the lender will definitely do a cash out refi hence the potential seed money

Also, my situation is unique because my wife is a traveling nurse, and I'm willing to do anything temporarily. Who knows where we'll go. Its pretty much arbitrary. I was reading a few top ten lists of "best cities to invest in RE" and Omaha, Nebraska was on that list, so was Dallas and Austin, TX. We might go to Omaha, who knows? Why not go to the best place to invest and invest a while?
I'm not opposed to remote management if it doesn't reduce cash flow to untenable levels and if the company is excellent.

The city I'm currently investing in is home base, its our home town, and its on its way to becoming somewhat of a college town, with the construction of a new four year branch of Texas A&M. It was also featured in Forbes Magazine a couple of years back as the second fastest growing economy in cities with under 500 thousand people (behind Mobile, Alabama, I think.) Anyway, the possibilities are limitless, but unfortunately right now, the money isn't. Thats why I feel like I have one shot to really parlay my first property into something that will be really great. I just don't know where or what that is.

As to the Coachella Valley. We've been here a short time and will be here until at least May. I've talked to a few area real estate agents and investors at length and I think investing here would be a good bet if you could buy right.

I'm not sure of the vacancy rates on condos, but there are quite a few short sales happening and I'm told there is flip potential for sure. I think a buy and hold strategy could work with conventional leases for sure, though.

I do know there are many redeeming qualities about this area. I don't mean to rub it in, but I will since I'm just here for a bit. You guys are freezing, but I just went to farmers market and bought a crate full of fresh veggies! And the retirees love it. Whats not to love? In the winter time anyway. Summertime, I hear its hot as an anvil.